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Modi-Merkel mutually beneficial partnership set to continue

Arunima Gupta

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Germany is gearing up to vote for the 19th Bundestag or the Lower House of the Parliament which will, in turn, elect the German Chancellor on 24th September 2017. The incumbent Chancellor, Angela Merkel is expected to win the elections and continue a fourth term.

However, in light of recent events, most evidently the migration crisis of 2015, an absolute majority is doubtful for the Merkel administration, rendering coalition as the most plausible option. While major competition comes from Martin Schulz, the leader of Social Democratic Party of Germany (SPD), the rise of Alternative for Germany (AfD) having strong anti- immigration Eurosceptic views, makes a coalition even more complex.

Despite all doubts, Chancellor Merkel has emerged as an anchor of stability, ranking amongst the most powerful and influential in the world, standing unabated amidst crisis and criticism. Her victory is as crucial to Brussels as it is to Berlin, as Germany remains the strongest European Union member in the post-Brexit era. The politically unstable environment of the “west” has provided an opportune movement for Berlin to look towards its long-standing Asian friend – India.

For India, a fourth term of Merkel administration could wield the following benefits. First, it will lead to a steadfast progress on achieving goals of the fourth intergovernmental consultations (IGC) signed by Indian Prime Minister Narendra Modi and German Chancellor Angela Merkel, in May 2017. Primarily, these entail to cyber security issues, strengthening of economic ties and fostering developmental cooperation, especially in realms of renewable energy and green growth. Secondly, relations between India and the European Union after Brexit will continue to be stable. Much recently, under the ‘Make in India’ initiative of the Indian Government, German Mittlesand (MSMEs) have been allowed fast-track entry into the Indian market. With a strong voice in EU and Germany’s significant economic engagement with India, Merkel could lead to India-EU free trade negotiations, while addressing Indian interests. And lastly, a Merkel-Modi alliance could serve as an international example of fostering mutually beneficial developmental cooperation. Both the sides have demonstrated a strong commitment towards Paris Agreement and also convened talks such as the India- Germany Dialogue on Africa, held in May 2017. A developmental model, based on shared aspirations of economic prosperity can successfully bridge the gap between the developed and developing countries.

A government led by Martin Schulz, on the other hand, will not hamper India-Germany relations per se, but may have an effect on India-EU relations. As the former President of the European Parliament, Schulz has pushed for stronger EU integration calling for all-pervasive Eurobonds and European finance minister. This could tilt India-EU free trade negotiations towards European interests. The SPD has also been critical of Merkel’s stance to increase German contribution to NATO. Considering Washington’s recent call to its NATO allies to station troops in Afghanistan and acknowledgment of India’s role in the peace process, the India-German commitment for Afghan stability could be perturbed.

However, the dynamics of international order- Brexit, Trump’s win in the US, North Korean missile ambitions and Chinese expansionist agenda has inclined popular support in Merkel’s favour as a more diplomatically balanced yet strong leader. Her Indian counterpart, PM Modi has faced similar domestic and regional challenges, but emerged as a promising leader, representative of strong national aspirations. At the international level, India and Germany as members of G-4 nations have supported their contemporary’s claim for membership in UN Security Council. Having duly recognized individual potentials, both the leaders have extended the threads of amicability beyond national and international interests. The Indian PM Modi, on his visit to Germany, received the guard of honour to German chancellor. He reciprocated by presenting manuscripts by eminent Indian scientist Sir C V Raman, on the realization that Merkel is a doctorate scholar in quantum chemistry herself. With diplomatic currents changing, it is this friendship that is bound to strengthen the relations between India and Germany as long-standing global partners.

With the likeliness of German Chancellor Merkel and Indian PM Modi serving another political term, there prevails immense potential to embark on a mutually beneficial path to peace, prosperity and sustainability in an increasingly reclusive world.

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South Asia

The “Neo-Cold War” in the Indian Ocean Region

Kagusthan Ariaratnam

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Addressing an event last week at London’s Oxford University, Sri Lankan Prime Minister Ranil Wickremesinghe said some people are seeing “imaginary Chinese Naval bases in Sri Lanka. Whereas the Hambantota Port (in southern Sri Lanka) is a commercial joint venture between our Ports Authority and China Merchants – a company listed in the Hong Kong Stock Exchange.”

Prime Minister Wickremesinghe has denied US’ claims that China might build a “forward military base” at Sri Lanka’s Hambantota port which has been leased out to Beijing by Colombo. Sri Lanka failed to pay a Chinese loan of $1.4 billion and had to lease the China-developed port to Beijing for 99 years. Both New Delhi and Washington had in the past expressed concerns that Beijing could use the harbor for military purposes.

Image courtesy of Google

The USA, China, and India are the major powers playing their key role in the “Neo-Cold War” in Central Asian landmass and the strategic sea lanes of the world in the Indian Ocean where 90% of the world trade is being transported everyday including oil. It is this extension of the shadowy Cold War race that can be viewed as the reason for the recent comment made by the US Vice President Mike Pence that China is using “debt diplomacy” to expand its global footprint and Hambantota “may soon become a forward military base for China’s expanding navy”.

According to some analysts, the deep-water port, which is near a main shipping route between Asia and Europe, is likely to play a major role in China’s Belt and Road Initiative.

In his book “Monsoon” Robert D. Kaplan (2010), a senior fellow at the Centre for a New American Security notes the following:

[…] the Indian Ocean will turn into the heart of a new geopolitical map, shifting from a unilateral world power to multilateral power cooperation. This transition is caused by the changing economic and military conditions of the USA, China and India. The Indian Ocean will play a big role in the 21st century’s confrontation for geopolitical power. The greater Indian Ocean region covers an arc of Islam, from the Sahara Desert to the Indonesian archipelago. Its western reaches include Somalia, Yemen, Iran, and Pakistan — constituting a network of dynamic trade as well as a network of global terrorism, piracy, and drug trafficking […]

Two third of the global maritime trade passes through a handful of relatively narrow shipping lanes, among which five geographic “chokepoints” or narrow channels that are gateway to and from Indian ocean: (1) Strait of Hormuz (2) Bab el-Mandab Passage (3) Palk Strait (4) Malacca and Singapore Straits and (5) Sunda Strait.

While Lutz Kleveman (2003), argues that the Central Asia is increasingly becoming the most important geostrategic region for the future commodities, Michael Richardson (2004) on the other hand explains that the global economy depends on the free flow of shipping through the strategic international straits, waterways, and canals in the Indian Ocean.

According to the US Energy Information Administration (EIA)  report published in 2017, “world chokepoints for maritime transit of oil are a critical part of global energy security. About 63% of the world’s oil production moves on maritime routes. The Strait of Hormuz and the Strait of Malacca are the world’s most important strategic chokepoints by volume of oil transit” (p.1). These channels are critically important to the world trade because so much of it passes through them. For instance, half of the world’s oil production is moved by tankers through these maritime routes. The blockage of a chokepoint, even for a day, can lead to substantial increases in total energy costs and thus these chokepoints are critical part of global energy security.  Hence, whoever control these chockpoints, waterways, and sea routes in the Indian Ocean maritime domain will reshape the region as an emerging global power.

In a recent analysis of globalization and its impact on Central Asia and Indian Ocean region, researcher Daniel Alphonsus (2015), notes that the twists and turns of political, economic and military turbulence were significant to all great players’ grand strategies:

(1) the One Belt, One Road (OBOR), China’s anticipated strategy to increase connectivity and trade between Eurasian nations, a part of which is the future Maritime Silk Road (MSR), aimed at furthering collaboration between south east Asia, Oceania and East Africa; (2) Project Mausam, India’s struggle to reconnect with its ancient trading partners along the Indian Ocean, broadly viewed as its answer to the MSR; and (3) the Indo-Pacific Economic Corridor, the USA’s effort to better connect south and south east Asian nations. (p.3)

India the superpower of the subcontinent, has long feared China’s role in building outposts around its periphery. In a recent essay, an Indian commentator Brahma Chellaney wrote that the fusion of China’s economic and military interests “risk turning Sri Lanka into India’s Cuba” – a reference to how the Soviet Union courted Fidel Castro’s Cuba right on the United States’ doorstep. Located at the Indian Ocean’s crossroads gives Sri Lanka the strategic and economic weight in both MSR and Project Mausam plans. MSR highlights Sri Lanka’s position on the east-west sea route, while Project Mausam’s aim to create an “Indian Ocean World” places Sri Lanka at the center of the twenty-first century’s defining economic, strategic and institutional frameworks. Furthermore, alongside the MSR, China is building an energy pipeline through Pakistan to secure Arabian petroleum, which is a measure intended to bypass the Indian Ocean and the Strait of Malacca altogether.

A recent study done by a panel of experts and reported by the New York Times reveal that how the power has increasingly shifted towards China from the traditional US led world order in the past five years among small nation states in the region. The critical role played by the strategic sea ports China has been building in the rims of Indian Ocean including Port of Gwadar in Pakistan, Port of Hambantota in Sri Lanka, Port of Kyaukpyu in Myanmar and Port of Chittagong in Bangladesh clearly validates the argument that how these small states are being used as proxies in this power projection.

This ongoing political, economic and military rivalry between these global powers who are seeking sphere of influence in one of the world’s most important geostrategic regions is the beginning of a “Neo-Cold War” that Joseph Troupe refers as the post-Soviet era geopolitical conflict resulting from the multipolar New world order.

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South Asia

IMF bail-out Package and Pakistan

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Pakistan may approach IMF to bail-out the current economic crisis. It is not the first time that Pakistan will knock the doors of IMF. Since 1965, Pakistan has been to IMF 17 times. Almost all of the governments has availed IMF packages. Usually, IMF is a temporary relief and provide oxygen for short time so that the patient may recover and try to be self-sustained. The major role of IMF is to improve the governance or reforms, how the ill-economy of a country may recover quickly and become self-sustained. After having oxygen cylinder for 17 times within 5 decades, Pakistan’s economy could not recover to a stage, where we can be self-sustained and no more looking for IMF again and again. This is a question asked by the common man in Pakistan to their leadership.  People are worried that for how long do we have to run after IMF package? The nation has enjoyed 70 decades of independence and expects to be mature enough to survive under all circumstances without depending on a ventilator.

The immediate impact of decision to approach IMF, is the devaluation of Pakistani Rupees. By depreciating only one rupee to US dollar, our foreign debt increases 95 billion rupees.  Today we witness a depreciation of rupee by 15 approximately (fluctuating), means the increase in foreign debt by 1425 billion rupees. Yet, we have not negotiated with IMF regarding depreciation of Rupees. Usually IMF demand major depreciation but all government understands the implications of sharp devaluation, always try to bargain with IMF to the best of their capacity. I am sure, Government of Pakistan will also negotiate and get the best bargain.

IMF always imposes conditions to generate more revenue and the easiest way to create more income is imposing tax on major commodities including Gas, Electricity and Fuel. Pakistan has already increased the prices of Gas, Electricity and Fuel. It has had direct impact on basic necessities and commodities of life. We can witness a price hike of basic food, consumer items and so on. Except salaries, everything has gone up. While negotiating with IMF formally, we do not know how much tax will be increased and how much burden will be put on the common man.

We believe, our rulers know our capacity and will keep in mind the life of a common man and may not exceed the limit of burden to common man beyond its capacity. We are optimistic that all decisions will be taken in the best interest of the nation.

It is true, that Pakistan has been to IMF so many times, so this might be a justification for the PTI Government to avail IMF package. But, there are people with different approach. They have voted for change and for “Naya” (new) Pakistan. They do not expect from PTI to behave like previous several governments. If PTI uses the logic of previous governments, may not satisfy many people in Pakistan.

Especially, when Pakistan was in a position to take-off economically, we surrendered half way, may not be accepted by many people in Pakistan.

The government has explained that other options like economic assistance from friendly countries was also very expensive, so that they have preferred IMF as more competitive package. I wish, Government may educate public on the comparison of available options, their terms and conditions, their interest rate, their political conditions, etc. There might be something confidential, Government may avoid or hide, one may not mind and understand the sensitivity of some of the issues. But all permissible information on the terms and conditions of all options in comparison, may be placed on Ministry of Finance’s website or any other mode of dissemination of knowledge to its public.

Against the tradition, people of Pakistan have voted Imran Khan, who so ever was given ticket of PTI, public has voted him or her blindly in trust to Imran Khan. A few of his candidates might not be having very high capabilities or very good reputation, but, public has trusted Imran Khan blindly. Imran Khan is the third most popular leader in Pakistan, after Jinnah the father of nation, and Zulfiqar Ali Bhutto, the Former Prime Minister of Pakistan in 1970s.

People of Pakistan have blindly trusted in Imran Khan and possess very high expectations from him. I know, Imran Khan understands it very well. He is honest, brave and visionary leader and I believe he will not disappoint his voters.

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Now India denies a friendly hand: Imran Khan debuts against arrogant neighbors

Sisir Devkota

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Imran Khan is facing the brunt for overly appeasing its arch rival-India. On September 22, Khan tweeted that he was disappointed over India’s arrogant reply to resume bilateral talks in the UNGA and that he had encountered many “small men” in big offices unable to perceive the larger picture.I am observing a south Asian order changing with Khan’s rise in Pakistani politics. We in Nepal need to grasp the possible reality before circumstances shall engulf our interests.

Observation 1

Narendra Modi was undoubtedly “The Prince”of South Asia from Niccolo Machiavelli’s 16th century classic political narrative. I sense the old prince acting in distress over the rise of a new one. Imran Khan’s invitation for a ministerial level meeting in New York; amidst the eyes of foreign diplomats could not have been a better approach by Pakistan in a long time. Instead, Indian foreign minister, Sushma Swaraj dismissed the offer, blaming Pakistan’s double standard in killing Indian forces and releasing Burhan Wani’s (India’s terrorist and Pakistan’s martyr) postal stamps. Khan did not sanction the postal release, but as the Prime Minister of Pakistan, he must be held accountable for failing to stop the killings,just when talks were supposed to happen. He should have addressed the highly sensitive Indian government. But, I do empathize with Khan’s statement, “small men in big offices”; as he clearly outlined the exact problem. He directly called upon the Indian government to think bigger and escape circumstances to solve historical problems. Narendra Modi has developed a new rhetoric these days; that India is not going to keep quiet over Pakistan’s actions. It fits the nature of Machiavelli’s Prince as an authority which can maintain national virtue. Unfortunately, I do not buy Modi’s rhetoric. The Prince has come a bit late in his tenure to act for Indian virtues. I am sure many at the UNGA would have noticed India’s apprehension in the same manner. I suspect that the ex-prince is facing insecurities over the fear of losing his charisma. Nepal, in particular was charmed by his personality when he first visited our capital, with promises that flooded our heart. And then, we faced his double standard; right after the massive earthquake in 2015. Nobody in Nepal will sympathize with Swaraj’s justification of cancelling the meeting.

Observation 2

Let me explain the source of insecurity. Modi has thrived by endorsing his personality. A tea man who worked for the railways under great financial hardships, became the poster man of India. He generated hope and trust that his counterparts had lost over the years. His eloquent stage performance can fool the harshest of critics into sympathizing his cause. People have only realized later; many macro economists in India now argue that demonetization was, perhaps, one of the worst decisions for India’s sake. Narendra Modi is India sounds truer than Narendra Modi is the Prime Minister of India.

Imran Khan, a former cricketer does not spring the same impression as Modi. Khan, a world champion in 1992, is known for his vision and leadership in Cricket. Comparatively, Khan does not need to sell his poster in South Asia. He does not cry over his speeches to garner mass euphoria. Ask anybody who’s into the sport and they will explain you the legend behind his name. I suspect that Modi has realized that he is going to lose the stardom in the face of Pakistan’s newly elected democratic leader. After all, the Indian PM cannot match Imran’s many achievements in both politics and cricket. I suspect that Modi has realized the fundamental difference in how his subjects inside India and beyond are going to perceive Imran’s personality. I expect more artificial discourses from India to tarnish Imran’s capabilities.

Nepal & Pakistan

You will not find Pakistan associated with Nepal so often than with India. Frankly, Nepal has never sympathized with Indian cause against Pakistan. We have developed a healthy and constructive foreign relations with the Islamic republic. However, there has always been a problem of one neighbor keeping eyes on our dealings with another. Indian interests have hindered proximity with past governments. Now, Imran Khan has facilitated the platform for deeper relations. He does not carry the baggage of his predecessors. He is a global icon, a cricket legend and a studious politician. He is not the result of mass hysteria. Imran Khan has pledged to improve Pakistan’s economy, reinstate foreign ties and boost regional trade. For me, he is South Asia’s new Machiavellian prince; one that can be at least trusted when he speaks.

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